Skip to comments.UPS drops spousal coverage, teachers get hours cut due to ObamaCare
Posted on 08/21/2013 8:33:31 AM PDT by SeekAndFind
Thanks to the delayed employer mandate in ObamaCare, we are now sixteen months away from enforcement of those statutes, even though they go into effect in four months. Are employers taking a break from ObamaCare prep? Not hardly. Today we have three new stories about how the perverse incentives of the ACA will impact workers, starting with UPS, which has just announced that it will stop offering health-care coverage to spouses — and explicitly cites ObamaCare as the reason (via Jim Geraghty and Jeryl Bier):
United Parcel Service Inc. plans to remove thousands of spouses from its medical plan because they are eligible for coverage elsewhere. The Atlanta-based logistics company points to the Affordable Care Act, or Obamacare, as a big reason for the decision, reports Kaiser Health News.
The decision comes as many analysts are downplaying the Affordable Care Act’s effect on companies such as UPS, noting that the move reflects a long-term trend of shrinking corporate medical benefits, Kaiser Health News reports. But UPS repeatedly cites Obamacare to explain the decision, adding fuel to the debate over whether it erodes traditional employer coverage, Kaiser says.
Rising medical costs, combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost, UPS said in a memo to employees.
As I pointed out a couple of weeks ago, the law requires employers to subsidize health-insurance costs for employees, but not for dependent children (meaning the employee has to pay full price), and they don’t have to cover spouses at all — even if the spouses don’t have their own jobs. Under that scenario, employees with children and stay-at-home spouses are better off going into the exchanges and getting taxpayer-fueled subsidies to buy their own family insurance — even though a mass migration into those exchanges will create an avalanche of unforeseen cost to ObamaCare. And sure enough, some workers have figured it out:
Just imagine saying this to your boss: “Don’t offer me health insurance benefits.”
Those apparently bizarre words might actually end up being uttered next year because of a quirk in Obamacare that could financially penalize a number of workers and their families.
That quirk means that for some people, it will be more economical to have an employer not offer health insurance subsidies for them and their familiesand for the entire family to then instead be able to buy insurance with government subsidies on the Obamacare state health exchanges.
“For a lot of people, that may be a better deal,” said Jonathan Wu, co-founder of the price-comparison site ValuePenguin.com. “We’re talking like thousands of dollars.”
Wu refers to this as “weird”:
What Wu calls one of several “weird” unintended effects of the Affordable Care Acteffects that lead to some less-than-affordable outcomesstems from a rule that was adopted by the Health and Human Services Department last winter and goes into effect in 2014.
Under the ACA, popularly known as Obamacare, a worker whose employer offers company-subsidized health insurance that costs the worker less than or equal to 9.5 percent of household income is considered to be receiving “affordable coverage.” …
But HHS has ruled that the affordability test will consider only the cost to workers of buying insurance from their company’s plan for themselvesnot that of insuring their entire family.
The solution is to have the employer end health-care coverage so that workers then qualify for the exchanges. The business will have to pay a penalty, but that’s far below the cost of providing subsidized health insurance, so they win, too. The only losers in this scenario are taxpayers who have to fork over billions more than anticipated in exchange subsidies.
The proper term isn’t “weird.” It’s “perverse incentives,” and we’ve been warning about them since ObamaCare was first proposed.
Not all workers have this much control over their health-insurance offerings, though. Substitute teachers in Trenton, New Jersey won’t even get the opportunity to make that choice after the Hamilton school district limited their potential work schedules, specifically because of ObamaCare:
The Hamilton school district has told its substitute teachers they will be limited to working a maximum of four days a week in the coming school year because of the federal health reform laws future requirement that full-time employees be provided with health insurance.
A memo mailed to the substitutes in late June said that the restriction resulted from a provision of the Patient Protection and Affordable Care Act that will require employers to provide affordable health insurance for full-time employees and their dependents. Full-time is defined as an average of 30 or more hours per week.
This memorandum will serve as official notice that, as of the 2013-2014 school year, strict limits will be placed on the number of working hours of part-time/temporary employees, read the letter signed by director of human resources Katherine Shilenok-Wright.
Hey, didn’t Obama say he would delay enforcement of that employer mandate? Hamilton doesn’t want to wait around to find out:
The provision of the federal law was originally scheduled to go into effect in January 2014, and last month the federal government delayed enforcement until 2015, but the memo says the limits on substitute teachers hours will go into effect when school starts next month.
Once government sets the conditions for perverse incentives in the marketplace, it doesn’t take long for businesses and consumers to adjust to them.
To all those effected who vote for and support LIB/DIMs.....Bwahahahahahahaha! Merry Christmas.
Here’s your change enjoy.
They are neither weird nor unintended. The purpose of the act was to force us to single (government) payer.
You mean, Merry Nondenominational Winter Solstice
I keep watching the number of people siging the petition below.(It dramatically jumped from 384,397 to 439,366 today. I bet the UPS news is part of the reason why.)
UPS is union and they WANTED this crap.
Hard to feel sorry for them when they are only getting what they asked for.
Public school teachers did ask for it, though.
UPS drivers are Teamsters union represented and they were pushing Obamacare hard.
I have about as much pity for them as I do the Obama voters who get laid off.
I have been with UPS 20 years. I am a non-union employee. My husband’s insurance where he works would cost 3 times more than what it has under my plan. This is going to hurt us for sure.
I hope that his is merely the first trickle of a tidal wave of suffering that engulfs obama voters.
Unfortunately, the NON-OBAMA voters suffer too.
well, it looks like UPS is only removing insurance from non-union workers.
I’m so sorry.
Prayers that this situation improves for you and your family.
Obamacare has GOT to GO. It’s going to hurt us all eventually.
Likely. However Obama is too stupid to know that. He only did what his handlers told him to,
The man is NOT STUPID he is destroying the country he hates ON PURPOSE .
Stupid = the people who wanted this monstrosity and thought they were going to get something wonderful at the expense of someone else.
I will agree that he hates the US and Capatalism. However, I still believe Soros, Jarrett and others are the brins behind Obama.